ROC, on behalf of its subsidiary Anzon Australia Limited ("AZA"), has advised that the participants in the BMG Project have given notice to BW Offshore ("BW") of termination of the Letter of Intent ("LOI") signed in July 2008 for the supply of a floating production storage and offloading vessel ("FPSO") for the proposed BMG Phase-2 Project, due to failure of the parties to reach agreement in relation to the FPSO contract.
BW has indicated that it will seek to recover costs relating to terminating third party vendor contracts from the participants in the BMG Project. Whilst the precise amount of these costs have not been disclosed to the participants, the participants in the BMG Project dispute that these costs are payable under the LOI. In any event under the LOI these costs are capped at US$78.5 million. The participants in the BMG Project dispute that these costs are payable under the LOI.
As a result, AZA and the other participants in the BMG Project are reviewing alternative proposals for optimal development of the BMG Oil and Gas Field including through alternative FPSOs.
BMG operations are continuing using the Crystal Ocean FPSO where current production capacity from the field is approximately 11,000 bopd.
Participating interests in the BMG Project are as follows:
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